Public-Private Partnership in Healthcare: India

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Public hospitals around the world are facing a growing financial crisis, squeezed by rising healthcare costs and public budget constraints. Public-Private Partnerships (PPP) in the management of public hospitals can provide innovative ways to control costs, improving the viability of public hospitals and the quality of their services.

In India "corporatisation" has led to the expansion of urban secondary care hospitals at the expense of rural, primary health care facilities. State governments have restructured hospitals with World Bank loans. Equipment and pharmaceutical companies have developed partnerships with specialist hospitals.

The private sector has grown unevenly in India. Individual private practitioners made up part of the private sector. There has also been an expansion of hospitals and nursing homes, so expanding the number of private sector beds but the size of many of these establishments is relatively small. Larger hospitals, run under business principles, are often partnered by Indian doctors and non-Indian doctors and are based in urban areas. The Apollo hospital group was the first of these hospitals.

The "corporatisation" of hospitals in India has already led to increased resources going to acute care with fewer to primary health care which the majority of the rural population will need as their first point of use of health care. Purohit (2001) quotes the National Sample Survey Organisation (NSSO) of India comparison of estimates of utilisation of health care facilities in 1986-7 and 1995-6. The NSSO estimates suggest that "there was a rise in inaccessibility to treatments of 9% due to financial reasons and 6% due to lack of facilities". This study also found that there had been a decrease in use of public health care providers from 26% to 19% in rural India and from 28% to 20% in urban areas. Use of hospital facilities also declined in both rural and urban areas.


Baru R.(2000) Privatisation and...
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